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Competition and Competition Policy in the Trans-Tasman Air Travel Market

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  • Tim Hazledine

Abstract

"New data on air fares offered on 29 trans-Tasman and domestic New Zealand routes are analysed to test whether competition between traditional or 'legacy' airlines still matters for pricing in the new air travel regime characterised by internet booking systems and competition from low cost carriers. It is found that market structure does indeed still matter. Air fares are significantly lower on those domestic New Zealand routes where Air New Zealand faces competition from Qantas. In addition, on the trans-Tasman routes, the new entrants Virgin (Pacific) Blue and Emirates have put competitive pressure on Air New Zealand and Qantas, but such pressure would not be sufficient to compensate for loss of independent competition between the larger incumbents." Copyright (c)2008 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research.

Suggested Citation

  • Tim Hazledine, 2008. "Competition and Competition Policy in the Trans-Tasman Air Travel Market," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 41(4), pages 337-348, December.
  • Handle: RePEc:bla:ausecr:v:41:y:2008:i:4:p:337-348
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    Cited by:

    1. Wang, Kun & Tsui, Wai Hong Kan & Li, Lan-Bing & Lei, Zheng & Fu, Xiaowen, 2020. "Entry pattern of low-cost carriers in New Zealand - The impact of domestic and trans-Tasman market factors," Transport Policy, Elsevier, vol. 93(C), pages 36-45.
    2. Duval, David Timothy & Schiff, Aaron, 2011. "Effect of air services availability on international visitors to New Zealand," Journal of Air Transport Management, Elsevier, vol. 17(3), pages 175-180.

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